A few hundred crores frozen and more shell companies discovered; despite an RBI warning, a number of banks opened up only to the I-T authorities on these Speak Asia accounts—and what was the Financial Intelligence Unit doing?

The Income-Tax (I-T) Department has stepped into the investigation into the Singapore-based money circulation scheme called Speak Asia, which has ensnared a massive 19 lakh gullible Indians into paying Rs11,000 each and become "panelists". Moneylife learns that the I-T investigation began in June and it has written to two banks-ICICI Bank and ING Vysya-for more information on the various front entities, registered in India, which helped Speak Asia collect money and remit it overseas.

More shockingly, sources in Delhi tell us that banks may not have been as careless about allowing Speak Asia's shady operations as it has appeared. We learn that some of the banks had filed multiple Suspicious Transaction Reports (STRs) to the Finance Ministry's Financial Intelligence Unit-India (FIU) as required under the Prevention of Money Laundering Act. These reports are supposed to alert the government to money laundering and terrorist funding. There is no indication of the FIU having acted on these reports although over Rs500 crore is understood to have flown out of India to Speak Asia's Singapore entity.

We also learn that the RBI (Reserve Bank of India) had issued a bland circular to all banks on 23 May 2011 about Speak Asia's modus operandi and warning them to be careful while opening account for such schemes since they fell under the purview of the Prize Chits and Money Circulation (Banning) Act of 1978 or face stringent action. Interestingly, while the banks have maintained that they have no accounts of Speak Asia, they have been a lot more forthcoming to the tax authorities and revealed many more names, which opened accounts for Speak Asia related entities.

Another significant discovery is that apart from Tulisyat Tek Pvt Ltd (which, as Moneylife reported earlier, is an account-holder with ICICI Bank), Speak Asia had at least two other core accounts which were used to remit funds abroad. These were Kritanj Management Services and Star Enterprises. These in turn received funds from at least 20 other entities in various banks. Our sources say that the core accounts received large fund transfers from a host of banks including Allahabad Bank, Citibank, Yes Bank, HDFC Bank, State Bank of India, Axis Bank and others. We learn that hundreds of crores of rupees were first pooled into the accounts of Tulisyat Tek and Kritanj Management Services and then transferred to Haren Ventures in Singapore.

On 16th May, Moneylife wrote that although Speak Asia is registered in Singapore (all its senior officials carry visiting cards with Singapore addresses only), it has other fronts in India such as Speak India Network Marketing P Ltd, (registered in Mumbai, with Indian Directors) and Speak India Online. We also wrote that these companies had accounts in ICICI Bank and ING Vysya and money collected in these accounts (from people who paid Rs 11,000 per identity in the hope of earning absurdly high returns and taking the chain forward) was transmitted to another Mumbai-based company called Tulsiatek (the correct name of this company, we now know, is Tulisyat Tek Pvt Ltd). This company in turn transferred the money to a Singapore-based entity called Haren Ventures Pte owned by its shadowy promoter Harender Kaur. The only time Ms Kaur, owner of Haren Ventures, has made a personal appearance in India is at its mega-bash at Goa. Haren Ventures claims it sells an e-magazine on survey at an exorbitant price.

To recap, Speak Asia originally claimed to pay panelists for filling out e-surveys for clients. However, at a press conference in Mumbai, when the company was unable to name its clients (and those it named, like ICICI Bank and Bata denied giving it any business) it suddenly claimed that the Rs11,000 collected from each panelist was subscription for the e-magazine.

As the investigation continues, various authorities are probing the people behind these many accounts. While the Ministry of Corporate Affairs pretended to conduct an investigation and gave it up claiming it did not have powers, the Finance Ministry has also been caught napping if the Financial Intelligence Unit failed to act on suspicious transaction reports sent by banks.

The FIU is a national agency that not only receives and analyses suspicious transactions-it also coordinates and strengthens "efforts of national and international intelligence and enforcement agencies in pursuing the global efforts against money laundering and related crimes".

The irony is that millions of Indians are being looted everyday by money circulation and Ponzi schemes at every strata of society but the government has no interest in strengthening legislation to enforce the ban on their operation as envisaged under the Prize Chits and Money Circulation (Banning) Act.

Twitted by Sucheta Dalal on 22nd June

Kishore N

MLM - FRAUD

Money chain cheating in Medical Field - Asianet News Exclusive

robin

5 years ago

To
Suman Mukherjee
It seem to me that you have been analyzing the whole situation. I just want to ask few questions.
1. Its been about to 2 months why govt. hasnt come up with any action or words for the public till now? In last 2 months another thousands of people have joined.
2.WHy not govt. simply declare it either a scam, fraud or ponzi scheme?
3. Why there isnt any reports about various other survey companies which are duping people? There are more than dozen other such companies which combined members would be double than SAOL.
4. Govt. said they cannot take action against SAOL, but there are still so many franchisee operating in the country in almost every big cities, so why no action against them?

Take Action against MLM companies - HIGH COURT OF KERALA

According to various media reports a division bench of Hon. Kerala High Court directed the Police to take action against money-chain MLM companies even if there is no complaint.

B V KRISHNAN

5 years ago

The people who put their money into the Speakasia scheme are equally to be blamed for not conducting a due diligence before parting with their money. It is astonishing that well-read people do not exercise a fraction of the caution they exhibit while buying vegetables, before shelling out thousands of rupees into these fraudulant schemes.

Kishore N

5 years ago

AMWAY meeting BANNED

Kerala: Police banned the meeting of AMWAY which was to be held on a Hotel in Thrissur.

According to reports about 300 Amway distributors were already arrived in the hotel. But the Police declined to give them permission to conduct any meeting anywhere. The Kerala Police is taking all measures to stop the illegal money-chain business. The state of Kerala is now witnessing Networking scam called "money-chain scam".

The Director General of Police cautioned people of Kerala against the illegal Network marketing.

A little knowledge is a dangerous thing. So is a lot.
Pleeeease, help me!

Suncool Tinting

We have seen all these drama from last 2 months or so, why these people not getting anything from inquiry?

Suman Mukherjee

5 years ago

Dear Raj Gopal Setula and Abhishek,
The problem with you is that you yourself write crap and try to divert the issue, rather than focus on the issue. You people have employed someone to take on the writings in message boards. However, the net is becoming tight day by day and I hope your monkeying in the messages boards will soon stop. Before I speak further let me take your questions head on: and show you how your comments are not only hollow but also misplaced;
(i) Raj Gopal Setula writes, "Now, just recruited one of the leader of MLM named Suman mukherjee on 20th of June'11 in money life comment box to fight against Speak Asia by handling comments"--so whoever comments on your cheap money making gimmicks becomes a recruit of "Money Life"--what a assumption. For this someone should give you an award for such a great assumption. Is the government of India hearing??!!
(ii) The you say, "Hardly 100 people are reading your comment, Rest 21 Lac 99 thousand, 900 hundred Speak Asians joing great business in field. Who will care, everybody is very busy to do job in SAOL"--if that be case then why should you be worried on the same or how does it bother you? Why do you keep on fanning your outrage in this message board with your illogical comments?
(iii) "Just writing a long baseless argument about Speak Asia in comment box will not recovered your name Nfame". So which is called a baseless story?
Tell me will which part of my story is baseless. If the company is running a “Ponzi Scheme” and giving money, does it amount to generating money or adjusting money? You ignorant have your heard the name of Nuevo Financial Group and its founder, Leslie D. Murdock, who had attracted 1,200 investors and about $40 million and his pyramid schemes (read Ponzi Scheme) collapsed after sometime like a pack of cards? Like what Speak Asia is doing, the promise of high returns lured investors from all walks of life. Among the victims: Attorneys, doctors, dentists, engineers, veterinarians, retirees, contractors, blue collar workers even members of the clergy and an agent for the Bureau of Alcohol Tobacco and Firearms. Hence don't speak of Headlines Today employee? Can you give me a proof of the fame or this is another of your bluffs? This you call employment generation? Huh!! God help the cheats and the morons….!!
(iv) In a cunning way, Abhishek (Next time come up with another name due, we can make out from your writing styles) has said, "If I would have spent the same time on filling a survey i would have earned some money. Join and earn more rather than writing scraps.."
Oh yes, writing anything against your great venture, Speak Asia, which does not even have an office in Bombay (the commercial capital of India) becomes writing scrap--who are you trying to fool!!?? See you can fool some people some time but not all people all the time.
(v) The Abhishek writes, "This is the problem with our media in India they can’t digest higher success in less time and please ban these type of generalist you have who don't have any update go and update your self ...Speak Asia is long live company it’s going to open their office here in India and they have a large number of product as their Commerce and big bazaar tie up is in progress"
The problem is not with the media, the problem is people like you who sell some make belief story and try to ram your rotten thoughts into others throats!! What is success? Running a Ponzi scheme and possibly fooling the gullible investors—this is your success story? If this is your success story, then Dawood Ibrahim running a Rs.10, 000 Cr empire is also a success story!! Right??!!
Moreover, if your scheme is so brilliant then why do need a binary income story to provide blood for your so-called “Great Venture”? Why do you pay for the persons who bring "New New Bakra" to your so called income generating schemes? Does people pay to get a job except paying Kichbacks or under-hand money?
Moreover, if only filling surveys can generate so much income then what is the need for coming up with other businesses? Isn’t it a good business—getting around 35% per month on the investment made….Huh!! Tell how much business in India generates such high returns?

(vi) “I can make out that you are not from a commerce/sales background. In fact I even doubt your investigation abilities. Having, said that I admire your bluffing qualities as well.
The underwear that you purchase is worth Rs. 100/- which a retailer gets at Rs.35 to 40. Did you ever calculate? How much does a coke company charge you for a 80paise drink?
How much do u pay for an auto rickshaws, even though its running on CNG and demanding for increased fair as petrol prices have gone up?
Govt valuation of a property for specific area is Rs.1000/sq.ft. and builder demands Rs. 3000/sq.ft., did you ever calculate the profit margin?”

What is the new in it—you have doubted the investigating abilities of everyone, including Headlines Today, Sucheta Dalal and who not. You should be made the CHIEF ECONOMIC AND BUSINESS ADVISOR to the PM or for GOI, for your outstanding contributions in generating employments through a “Ponzi Scheme”. Right??!!

(vii) You write, “The day I heard SEBI is looking after the case I thought what is SEBI doing in this case coz spekasia's share is not traded on the Indian stock market neither it has applied for any IPO issue”

But where did I mention about SEBI—don’t try to divert the issue—very cunning, isn’t it…? Stop showing off your knowledge in the Equity Market---I am here for the last 15—17 years. So stop teaching me in this field….!!

(viii) Abhishek, then says as horrendous, thing, “RBI actually give clean chit to Speak Asia coz Speak Asia has paid a tax of 68cr to the Indian government which was as per the norms. And this news was quoted on Bloomberg which is much more genuine than your article”.
Hey man do you know how RBI functions? If you have known that you would not have come up with these kinds of craps. If simply paying some taxes gets you the RBI clearances then there would not have been FERA and other issues. What a sham these people are……very dirty!!
(ix) “Who made you owner of other business venture, you article is simply garbage. Someone rightly said empty vessel makes the most of noise. And guys we all know who the empty vessel is and where the noise is coming from”
Oh yes, I should now be answerable to someone who is a part of a Ponzi Scheme run by an overseas venture. When you cannot answer me in proper form, your desperation comes out in the open. I do not to prove my credibility to the captain of thug business concern. Just stop all these cheap modes of publicity.
(x) “Take one thing into notice that 11000 is not investment it’s the cost of buying E-Zine and 4000 is not the return. It’s the income u generate from reading E-zine and filling up the correct survey. You don’t fill the correct survey you don’t get the money as simple as that. Now when someone is paying for it you have a problem?. I am sure every one of us must have filled some survey on any random website that too for free”.

Just tell me why should anyone buy one magazine to get some job? Do we have to buy the shares of Reliance Industries to get a job there---this is the most stupid and ridiculous of the business of Speak Asia. This proves my point…!!
(xi) “It seems that people have not understood or misunderstood or have some vested interest to misrepresent or misinterpret. Speak Asia never offers any investment opportunity. They pay for different activity and your work. Any intelligent person will always check out for more correct information and fools will make comments based on their limited knowledge and ability to understand”.

If that is the case then what for are the Binary Incomes and what for in the investment in the E-Zine. Also before commenting on others abilities try to look at your face in any mirror. I can guarantee it would not look very nice.

Sucheta Dalal and her team is doing a laudable work, inspite of some rabid Speak Asians, trying to turnish her image in all possible way, which is the most unfortunate part--talk with some substance man, you ignorance about the business environment in India is only showing up in a number of your posts.

*जिंदगी की असली उड़ान अभी बाकि है !*

*जिंदगी के कई इम्तेहान अभी बाकि है !*

*अभी तो नापी है मुट्ठी भर जमीं हमने !*

*अभी तो सारा आसमां बाकि है !!*

ramkumar

thank you Sucheta for your relentless fight against swindlers

ASHISH PANDIT

5 years ago

When Sucheta Dalal is going to publish the papers of actions from various departments she claimed till now? I hope she produces all those papers here on her website to prove her points correct.
Useless use of a good medium called as Internet by this Dalal.

Prashant

5 years ago

Dear Abhishek

There is no use of talking to these blockheads. They can't accept their failure to prove speak asia wrong. Infact, what they will do is they will remove your genuine post . . .as they have done this to me. These moneylife people are CORRUPT TO THE CORE AND DIRTY who can't witness the upliftment of their own nation . . .SHAME on these people.

I don't need any advice from any fraudsters. i am exercising my fundamental right only.

What legal documents are with you to run such a "survey" company in India?

Abhisek

Dear Suman Mukherjee!!
There are some questions which can answer by you...

Que 1> Why this analysis now when the story has become a month old?

Que 2> The day I heard SEBI is looking after the case I thought what is SEBI doing in this case coz spekasia's share is not traded on the Indian stock market neither it has applied for any IPO issue.

Que 3> RBI actually give clean chit to Speak Asia coz Speak Asia has paid a tax of 68cr to the Indian government which was as per the norms. And this news was quoted on Bloomberg which is much more genuine than your article.

Que 4> who made you owner of other business venture, you article is simply garbage. Someone rightly said empty vessel makes the most of noise. And guys we all know who the empty vessel is and where the noise is coming from.

Que 5> Take one thing into notice that 11000 is not investment it’s the cost of buying E-Zine and 4000 is not the return. It’s the income u generate from reading E-zine and filling up the correct survey. You don’t fill the correct survey you don’t get the money as simple as that. Now when someone is paying for it you have a problem?. I am sure every one of us must have filled some survey on any random website that too for free.

Que 6> If you find the process of money transferring too complicated then must try to go to the root or stop commenting on it.

Que 7> It seems that people have not understood or misunderstood or have some vested interest to misrepresent or misinterpret. Speak Asia never offers any investment opportunity. They pay for different activity and your work. Any intelligent person will always check out for more correct information and fools will make comments based on their limited knowledge and ability to understand
*****************************************

I will give you an inside story, see if you can manage to burst this information. Most of the "Headlines Today" employees have registered for Speak Asia.
I can make out that you are not from a commerce/sales background. In fact I even doubt your investigation abilities. Having, said that I admire your bluffing qualities as well.
The underwear that you purchase is worth Rs. 100/- which a retailer gets at Rs.35 to 40. Did you ever calculate?
How much does a coke company charge you for a 80paise drink?
How much do u pay for an auto rickshaws, even though its running on CNG and demanding for increased fair as petrol prices have gone up?
Govt valuation of a property for specific area is Rs.1000/sq.ft. and builder demands Rs. 3000/sq.ft., did you ever calculate the profit margin?

******************************************
First of all who ever written these articles have u read about the Speak Asia business module how it’s paying? Before writing a article about something just research. First go and watch How Speak Asia works and how many are there who haven't paid yet? If company giving money after work what the hell u against for it. I think you guys need a TRP as star news did for few weak then what happened? They bark n barked and after all they just showed positive news. This is the problem with our media in India they can’t digest higher success in less time and please ban these type of generalist you have who don't have any update go and update your self ...Speak Asia is long live company it’s going to open their office here in India and they have a large number of product as their Commerce and big bazaar tie up is in progress.

Finally - I just registered my opinion on your scrap article, what did i get out of it? If I would have spent the same time on filling a survey i would have earned some money.

Join and earn more rather than writing scraps...

With regards
Abhisek

There are volumes of information in a public issue prospectus. But retail investors do not have access to one crucial number, that is, expected profits, that determines the most crucial aspect of a public issue—valuation

The Indian public issue market has evolved significantly over the years. Gone are the days when a small fly-by-night operator could easily raise a few crores with the help of a skimpy prospectus, a shady investment banker and some persuasive articles in the media. That was in the '90s. The mis-selling and mis-pricing was so severe (in one week of February 1995, as many as 74 issues, mostly shady companies, opened for subscription), that we suffered a phenomenon of 'vanishing' companies. The new issues market went into a coma for the next 10 years. Things have changed. We now have a market for Initial Public Offerings (IPOs) that is more sophisticated. Smaller companies cannot make an issue easily.

But can a thoughtful retail investor know enough about an IPO? Well, despite the vast improvement in IPO rules and disclosure, retail investors have to decide whether an IPO is good or bad based on two things: the past data and the IPO ratings. Past data is not that relevant—except for very large companies—and IPO grading does not give any indication of the valuation based on future earnings.
To judge an IPO, one has to know about the fundamentals of the business and promoters. This is now available thanks to IPO ratings put out by rating companies. But the single biggest decision about an IPO is the price—and for that, one needs to know the future profits to check whether the IPO is overpriced or not.

What investors need is opinion from multiple sources as to what the company's earnings would be a year forward - which alone influences whether the current valuation is attractive. This valuation becomes the basis for investment for retail investors. The only source of information that is available to the retail investors is the company prospectus. The prospectus will have a long list of the company's past data. The current regulations bar a company from discussing future expected earnings. This rule was made to prevent too rosy a picture being presented as was happening in the '90s. But does it really help the retail investors?

Remember that nothing is really known about a company making an IPO. There is no trading history of the company. No reports, no filings with the exchanges. The financial past, which is available in a thick prospectus full of legalese, may not be very useful. After all, as long as a company is unlisted, the promoters are free to do what they feel is right. The promoters of unlisted companies do not have to disclose anything about operations to the public, nor are they answerable to anyone as long as they are within the law. Indeed, given how easy it is to get around Indian laws, there is a temptation to depress profits by paying low taxes when the firm is unlisted and to boost profits in a year before the IPO to show how well they are doing to the investors. In such a scenario, when a company plans to go for an IPO, the most important factor is the future prospects of the company. The past earnings mentioned in the prospectus have no relevance, as the governance levels before and after the issues would be very different.

All this makes it really difficult for the retail investor to take an investment decision. For institutional investors, it's not that difficult because the lead managers and their analysts are desperate for their subscription. They would bend backwards to supply institutional investors with all the information and research they want about future earnings. Unable to decide what the real valuation of the company is, nobody thinks he is buying a decent bargain when he subscribes to an IPO. He thinks of flipping it to the greater fool on the listing day. In the next part we will look at some examples of how expensively companies have been priced, their earnings and pathetic post-issue price crash—all because so little is available in the public domain about future earnings.

User

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COMMENTS

K A PRASANNA

5 years ago

GREED, GREED AND GREED
The response to the public issues that hit the market in the recent past has been very tepid, particularly from retail investors, barring few exceptions. The sentiment of the retail investors, in the primary equity market, has been very badly shaken. The highly competitive merchant banking business making the merchant bankers to offer unrealistic and un reasonable premium to the issuers, to get the merchant banking assignment. Equally, the greedy promoters are exploiting the situation by unreasonable pricing of the issues.

The law of economics tells us that if the price is right, there would be demand for practically any scrip. It appears that the greed of the issuers got the better of their discretion and judgment. The lead managers to the issues also need to take the blame for poor professional judgment and advice whereby they could not persuade the issuers to price their issues realistically, leaving some thing for the investors too. Some issues get over subscription due to high premium in the grey market, which disappears, once the issue closes. The uninformed investors become victims of such market manipulations. Together, the issuers and the merchant bankers are responsible for the pathetic condition of primary market. FIRST CHOICE IPO.

Moneylife Team

Correct. But we have not suggested that future earnings should be part of the prospectus

Sachin A

5 years ago

If companies can manipulate their financial statements, in spite of the fact that these statements have to be presented to Auditors, IT Dept, SEBI etc how can any projection of future earnings based on opinion of the managements be considered reliable or useful?

If future earnings projections become a part of IPO disclosures, manipulation in the IPO market will increase and not decrease.

Finance minister Pranab Mukherjee said while inflation has implications with respect to sustaining the growth momentum, the drivers of economic expansion remain intact

New Delhi: Admitting that the Reserve Bank of India's (RBI) anti-inflation monetary measures may impact growth, finance minister Pranab Mukherjee today said the major challenge right now is to contain price rise, reports PTI.

“The monetary policy has been gradually tightened...

Monetary measures may end up moderating the growth if they have to be persisted for an extended period of time,” Mr Mukherjee said at an Assocham meet here.

However, he said in the short-term, moderating aggregate demand is critical to check inflation, which is ‘our major challenge’.

The RBI yesterday hiked key policy rates for the tenth time since March 2010, in a bid to tame inflation, which crossed the 9% mark in May.

Mr Mukherjee said while inflation has implications with respect to sustaining the growth momentum, the drivers of economic expansion remain intact.

“... The growth drivers of the economy remain broadly intact,” he said, adding, “I am so far hopeful that we should be able to repeat the growth performance of 2010-11 in 2011-12 as well,” he said.

In 2010-11, the country’s GDP is estimated to have grown at the rate of 8.5%.

Mr Mukherjee said as the government gears itself up for the task of preparing the 12th Five-Year Plan (2012-17), “We need to aim at a GDP growth of 9% to 9.5% for the Plan period.”

For this much expansion in GDP, the country's economy must grow at an average rate at least one percentage point higher than the 8.2% rate likely to be realised in the XII Plan.

On the financial inclusion required to promote the agenda of inclusive growth, Mr Mukherjee said it is a major challenge before the banking sector and financial system at large.

“Newer perspective and strategies toward financial inclusion are needed to reach the un-banked and the under-banked sections of our country,” he said.

While applauding the banking sector on its performance with respect to growth in deposits and net profits, Mr Mukherjee expressed concerns on its ‘asset quality’.

During 2010-11, non-performing assets (both gross and net) increased from the levels witnessed in the previous year.

“It is important for banks to constantly monitor and bring down non-performing assets (NPAs) to the previous level,” he said.

He also asked the banks to go for more innovation and come up with value-added offerings to meet the growing needs of customers.

He further said the government was in the process of deepening policy reforms in the financial sector and addressing gaps in overall economic regulatory architecture.

A Financial Sector Legislative Reforms Commission has been set up to re-write financial sector laws.

He also sought the support of all political parties for passage of the Direct Taxes Code (DTC) and Goods and Services Tax (GST) Act, considered to be the most important tax reforms in the country, in Parliament.